And if you win you’ll get this shiney fiddle made of gold,
But if you lose the devil gets your soul
– Charlie Daniels Band
Google’s recent decision to stop participating in Chinese censorship, as well as all the dithering leading up to it, is perhaps not unexpected. China is a one-party state that is in the business of information control. Google is the business of information access. How long would it be before these visions collided? There is plenty of chatter out there on the subject, but I want to take a step back from it for a moment, if but to wrestle with the intractability of this and similar situations. In short, I want to talk about a brave new world in which companies are having increasingly to do business with the devil (read: government).
Take, for example, healthcare: The U.S. government has accelerated what had before been a piecemeal takeover of that industry. (They have already taken over much of the auto industry, too.) This spate of quasi- and full nationalizations is dizzying when compared with the last fifty years. Not since pre-WWII Europe have we seen such economic corporatism. The line between states and corporations is becoming more blurred. The special-interest state on the rise and the entrepreneurship becomes more about gaming the competition with taxes, regulations and subsidies than about creating value for customers. Nobel laureate James Buchanan put it well:
Of course, this ain’t a good thing. More than any other U.S. President since FDR, Obama has been forced by the system – which breeds collusion between government and business – to become our national CEO. He might not have wanted that job. (It’s sooooo Mussolini, after all.) But then, what is Progressivism if not the U.S. offshoot of that sort of Euro-socialist industrial policy? In any case, the coven of Keynesians who surround Obama, coupled with his own belief in the power of government to make miracles, has put him in this position. So the President sits right in the Ninth Circle of Hell. And increasingly, many businesses are forced to kiss the ring. This, folks, is true power. But of course, the nexus between business and government does little for any given individual in the U.S. Instead it concentrates benefits on a few elites, who are in turn beholden. A perverse mutualism… one that is very disconcerting.
Of course, Google’s situation is not very different. Information flow is a phenomenon without borders. China, the US, Brazil — these are all invisible borders when it comes to information. In this sense, data really does “want to be free.” And Google’s calculation had been that they could be complicit in China’s ugly censorship policies if a greater good (and decent profits) might be achieved via keeping those remaining channels open. China is a fantastic market. One party rule is a cost of doing business — up to a point.
So what the hell are we supposed to do in a world in which Leviathan and Behemoth roam the world, sucking up resources willy-nilly, picking winners and losers as it suits the ends of power? We can be idealists when we can afford it. In this case, Google can afford it.
So idealism has won the day.
Who knows? This may have all been calculated from the start: Get entrenched in China, then refuse to cooperate at the point where extrication is more costly for the Chinese…
Either way, Google itself is a kind of corporate Leviathan in many ways. Luckily, Google is answerable directly to us, or We the Market. The same cannot be said for the Communist Party in China.
But let’s face it, we’re in an age where government and businesses are but faces of Janus. As I have written elsewhere:
Greed is best checked by the distributed forces of market reward and punishment (based firmly in the rule of law). By rule of law, I don’t mean capricious legislation cranked out either by venal men or do-gooders. I mean a basic, unchanging set of institutions that ensures predictability, transparency and equality before the law. These rules should be simple: Protect people from force, theft and fraud. There are those who think that if we can just build the right program, add enough resources, or find the right angels, we’ll somehow find an optimum point of public welfare. They are mistaken. Repeated mistakes and bitter experience should remind us otherwise. Government and greed ought never to mix.
But as long as government and business enjoy these greater levels of incest, the rules of markets will continue to be replaced by government fiat.
This perverse system of incentives will ultimately amount to economic cannibalism not wealth creation.
